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The General Law for the Control of Tobacco (Ley General para el Control del Tabaco) was published in the Official Journal of the Federation on May 30th. Thepurpose of the new Law is to regulate the use and importation of tobacco, as well as to protect the general population against exposure to tobacco smoke. The Law seeks to achieve a 100% smoke-free environment in public areas, workplaces and public transportation, as well as in schools. It also seeks to reduce the availability and demand for tobacco products through new security measures and sanctions. The Law imposes restrictions on the tobacco industry’s production, promotion, advertising, distribution, and sale of tobacco. It establishes product disclosure obligations that must occupy at least 30% of the front of a carton of cigarettes and 100% of the back of the package, as well as 100% of the sides of the carton. In addition, the new law requires businesses to post negative advertising in their establishments concerning the use of tobacco, as issued by the Mexican Department of Health (Secretaria de Salud). The new Law applies to any business that distributes any product containing tobacco, or which publicizes the use of tobacco (for example, magazines containing cigarette ads). Given that this is an area of concurrent jurisdiction, Mexican states may issue their own specific rules. Accordingly, the Law to Protect Non-Smokers of the Federal District (Ley de Protección a los No Fumadores del Distrito Federal) requires smokers to smoke outside of buildings. In the State of Neuvo León, local law allows smoking in public places, so long as such places have proper ventilation and smoke extraction systems.
On May 9th, new tax benefits for Mexican taxpayers known as the “Primary Sector” were published in the Official Journal of the Federation. The Primary Sectorincludes agricultural, forestry, ranching, or fisheries, as well as the cargo transportation, passenger transportation and related transportation sectors, to be applied during fiscal year 2008. Such benefits include granting easier documentation and management of deductions for purposes of Mexico’s Income Tax (Impuesto Sobre la Renta, or ISR), Single Rate Business Tax (Impuesto Empresarial a Tasa Única, or IETU) and Value Added Tax (Impuesto al Valor Agregado, or IVA). In this regard, the new decree provides common benefits for each sector, such as: (i) for purposes of the ISR and IETU, taxpayers may deduct expenses that otherwise do not meet the documentation requirements of Mexican tax laws, which could be related to labor services and necessary expenses for conducting their business activities; (ii) benefits allowing the deductibility of gasoline and diesel fuel; and (iii) rules that favor the treatment of salary credits contained in the IETU Law, as well as IETU credits. Further, the decree provides benefits in each sector, such as exemption from ISR or IETU for the Primary Sector, given such Sector includes basic activities and services, provided taxpayers comply with the requirements specified in the decree. Regarding the transportation sector, benefits regarding the management of cash, package services, and tax receipts are provided, among others. In general, the decree covers various technical rules in the legal and accounting area and offers various sectors of the economy a simplified process for meeting their tax obligations.
On March 26, the Second Chamber of Mexico’s Supreme Court (Suprema Corte de Justicia de la Nación) approved by a unanimous vote the legal decision bycontradiction of the decision: Ejido Land Parcel and Water Rights. The assignment, sale or transfer of rights by an individual Ejido member to a third party outside ofthe Ejido population nucleus infringes the property rights of the Ejido, which are collective by nature. This decision concludes that water rights pertaining to Ejidomembers’ land parcels, which have not been obtained through a civil law process, meaning such rights are only Ejido parcel rights and not civil property, may betransferred among Ejido members or neighbors of the Ejido population nucleus, receiving the same treatment granted to the transfer of Ejido land parcel rights intransactions with other Ejido members or neighbors, as set forth in Article 80 of the Agrarian Law (Ley Agraria). This requires one to respect preferential rights of theother Ejido members as such for part of the collective interests of the Ejido, and the Ejido may demand nullity of transfers of water rights to outside third parties. This case does not cover the supposed transfer of water rights individually assigned when such water rights are related to land parcels an Ejido member has obtained through civil property ownership procedure. However, it is possible to deduce that for purposes of a first sale of Ejido water rights to an outside third party, such sale would be subject to the same treatment as a first transfer of land parcel rights, which implies the requirement of providing notice of the offer to other Ejido members with a right of first refusal.
